The Effect of Health Insurance Coverage Mandates on the Education of Young Adults

This paper presents new evidence on the impact of dependent health coverage mandates on school attendance among young adults using data from the October Supplement of the Current Population Survey and a Difference-in-Differences style model. State mandates preceding the Affordable Care Act (ACA) and the ACA extended group coverage to dependents over 18. Unlike the ACA, the state mandates had education incentives. By leveraging time and age of eligibility variation within states in education incentives before and after the ACA, this paper examines the role of group coverage access on the college attendance decisions of young adults. This paper shows that the education requirements of these laws increased college attendance likelihoods by nearly four percentage points. After the ACA was enacted, those eligible for coverage in states with mandates that had a student requirement lost the explicit incentive to go to school. This change in incentives due to the ACA led to a two-percentage point reduction in college attendance rates among those previously eligible under a state mandate, suggesting some degree or “education lock” from tying dependent coverage eligibility to schooling. These results show that young adults place a significant value on group coverage, making it a significant factor in their higher education decisions. JEL Codes: H75, I13, I18, I21,J18